Constitutional Court Nullifies Funding for Thailand’s Rail Projects

Tourists chat in front of a billboard display of high-speed trains at Hua Lamphong railway station in Bangkok last March.

BANGKOK – Thailand's Constitutional Court has ruled as unconstitutional the legislation that sought huge financial support for the Yingluck government's ambitious rail and logistics development plan.

But officials have said that the project would still be implemented but on a smaller scale.

An analyst connected with the transport sector said that the project still exists and is bound to be carried out by a future government in the years ahead.

The project might be downsized to cut costs if the much- heralded scheme of modernizing Thailand's land-based transportation system would be implemented, the analyst said.

Given a chronic political conflict besieging the caretaker government of Yingluck Shinawatra, nothing about the projects will be officially discussed, let alone implemented, in foreseeable future. In fact, nobody in the capital can speculate when a post- election government would be set up to run the country.

Acting Transport Minister Chatchart Sitthipun said that the components of the project, earlier estimated to cost as much as 67. 8 billion U.S. dollars, will likely be carried out by a future government.

In lieu of the 67.8 billion U.S. dollars fund which would have been obtained in loans, either from domestic or overseas financial sources, the money might come from annual expenditures of the government, which would almost certainly result in a huge budget deficit. "Only the legislation was scuttled. The projects are still there, waiting to be implemented by a future government. All designs and plans earlier declared to the public will remain unchanged," said Chatchart who went on a road show in all regions of the country to promote the court-thwarted scheme.

Yingluck, who sought re-election as premier, lamented the court 's decision that struck down a legislation that was earlier approved by the parliament. She suggested that the future government should find ways and means to pursue the project that would benefit the whole country and hasten the development of the countryside. "It's a pity that the legislation was aborted. The infrastructure development scheme was primarily designed to enhance Thailand's competitiveness with other ASEAN states and reduce disparities between the people in the cities and those in the provinces," Yingluck said.

She repeatedly announced that the whole scheme had been designed to create a regional connectivity and Thailand could become a hub for land-based transportation and logistical services in the region.

Besides, she said that the project could further promote tourism in the country.

The project design includes elevated railway tracks for high- speed trains to link northeastern Thailand with southern China via Laos and with other states in the region, double-tracked railways in all parts of the country and motorways linking Bangkok's outlying provinces with the country's western and eastern regions, among others.

The opposition Democrat Party and other critics of the Yingluck government alleged that the project had been primarily aimed at serving the interests of northern constituents, most of them rabid supporters of the Pheu Thai (for Thais) Party, core of the Yingluck's coalition government.

Former premier and Democrat Party leader Abhisit Vejjajiva doubted that the high-speed train between Bangkok and Chiang Mai, the home province of Yingluck, should be given top priority among several other routes throughout the country. He said that given the huge outlay for the project, corruption and embezzlement would certainly happen.

They also criticized that the project has a very long time- frame, with an estimated 50-year time for repayment of the loans secured to finance the undertaking.

Viroj na Ranong of the Thailand Development Research Institute (TDRI) suggested that a future government might turn long-term projects into medium-term ones so that they will not consume too much funding at a time.

Na Ranong said that the rail project, which is part of the country's major infrastructure development scheme left undone since the past decades, might be implemented partially in the next three years.

"Thailand hardly implemented medium-term projects and preferred long-term ones which would certainly incur colossal sums of money and put the government's treasury discipline in question. It's time we started to do things on medium-term basis," he said.

Given the estimates that more than 80 percent of the 67.8 billion U.S. dollars funds would have been earmarked for the rail project, only some should be built over the next few years otherwise it would certainly cost too much of the loan money and provoke further objection from the opposition and the judicial branch.

Because of these developments, Chatchart said that the high- speed train project might be indefinitely suspended, despite its potentials in boosting cross-border transport of cargoes and tourists.

Under the original plan, the high-speed rail system would link Bangkok with Chiang Mai in the north, Nong Khai in the northeast, Rayong in the east, and Hua Hin in the south.